Help with RW talking points blaming current crisis on Dems

[margotb822]

Ok, here's what I've received. I'm trying to get a source from the person who sent it to me, but I haven't yet.

Absurdity: The root of the problem began with bad, mismanaged monetary policy by the Fed. Earlier this decade, the Fed overexpanded money and credit, reflected in historically low interest rates for far too long. This began a classic boom and bust business cycle, concentrated mostly in the housing bubble that crested with ridiculously high housing prices a couple of years ago. When that bubble burst, housing prices began to tumble.

This would have caused a mild downturn. But other bad government policies have greatly exacerbated the problem. These started with the Community Reinvestment Act (CRA), adopted during the Carter Administration, but greatly expanded during the Clinton years. CRA regulations demanded that financial institutions provide mortgages to lower income borrowers they thought were too risky, in unstable neighborhoods that they thought exposed their loans to too much risk. Barack Obama's friends at ACORN became major abusers of the CRA, using it to label financial organizations as racist and to block needed regulatory approvals, until ACORN was bought off with money and loans for its favored allies.

It was government backed Fannie and Freddie that came to be plagued with outright corruption. Clinton turned it into a feeding trough for Democrat cronies, led by Fannie Chief Franklin Raines, Clinton's former budget director. Fannie Mae actually tampered with its own accounting books to show profits that would allow Raines to gain huge incentive bonuses under his contract. Raines amassed $90 million in personal compensation and bonuses from a government-sponsored enterprise.

Fannie and Freddie sought to protect their ongoing racket by hefty political contributions to key political angels. The top recipient of such contributions has been Senate Banking Committee chairman Chris Dodd. The second highest recipient has been Barack Obama.

[ClassWarrior]

1. Three words: Reaganomics, deregulation, and FAILURE.

That's all that needs to be said.

(For once we have the bumper sticker and they have the tortured logic!)

NGU.

[wtmusic]

2. When they have to reach beyond 8 years ago they're full of BS.

W couldn't fix the "mess" in 8 years at the helm? Ludicrous.

[angstlessk]

3. earlier this decade was 2000...who was president then??? hmmmm I wonder?

on edit..not century but decade, but nothing but the word changed!

[Mojorabbit]

4. Phil Graham. I lay this at his feet. nt

[margotb822]

7. Yes, me too

I did that and this is the stupid response I got back. Ugh.

[Romulox]

5. If Dems shove a bailout down our throats, they will indeed own this crisis. nt

[Marr]

18. Exactly.

There's a very easy way to avoid being blamed for this. Don't do it.

[aintitfunny]

6. Pitiful, uninformed fantasy

More concerned with deflecting blame from where it belongs. Trying to lay it on pre-trickle down President Carter and then Bill Clinton, under whose leadership we enjoyed the greatest prosperity and who ended his Presidential career with a surplus. When it stretched so far as to pathetically attempt to encompass Barack Obama, that is true absurdity. Here we have yet another Republican patriot working hard to promote his party's continued destruction of these United States.

[HughBeaumont]

8. Yeah, let's conveniently skip over the Garn/St Germain bills, the repeal of Glass/Stegal by GLBA,

Massive deregulation during Reagan's era, corporations having the lowest tax rates in history, tax cuts, building an economy around floatation of bad debt and non-renewable energy . ..

Yeah, let's instead BLAME this ALL on the CLENIS.

Oh, and here's another one you can throw at them . . . in case they blame a 2-years-in Congress for the mess.

http://www.snopes.com/politics/business/votedforchange.asp

[sinkingfeeling]

9. Wrote this last Tuesday... Let's Shut Down the GOP meme; it's the Dems' fault

On every online comment section and discussion board I've looked at in the last two days, at least a dozen yahoos have claimed one or two of the following:

1. "It's the Dems fault because that stopped S.190 (to reform the regulation of Fannie and Freddie)in 2005."

2. "It's all the fault of poor/black people because the Dems pushed for giving these unqualified bums mortgage loans through the Community Reinvestment Act."

The best response to Number 1 is here: http://www.dailykos.com/storyonly/2008/9/2...

"S190 was discussed in the Senate Banking Committee on July 28, 2005 with the result, "Ordered to be reported with an amendment in the nature of a substitute favorably", which I believe is Congress speak for, "we don't like this, please go rewrite it and we may reconsider", i.e., the bill died in a Republican controlled committee and never came to the floor of the Senate or back to the Senate Banking Committee for reconsideration. S190 died in committee."

That statement is documented http://thomas.loc.gov/cgi-bin/bdquery/z?d1...

Also, both the White House and the American Enterprise Institute (neocon heaven) OPPOSED the passage of the House counterpart H.R. 1461, which did pass 331-90.

http://www.aei.org/publications/pubID.2270...

H.R. 1461: A GSE "Reform" That Is Worse than Current Law
" HR 1461--a bill that was supposed to create a “world class regulator”--is in fact a world class failure. Not only does it fail to improve significantly upon the regulatory authority of the Office of Federal Housing Enterprise Oversight (OFHEO), but it actually increases the opportunities for Fannie and Freddie to exploit their subsidies in order to expand into other areas of residential finance."

http://www.presidency.ucsb.edu/ws/index.ph...

"The Administration has long called for legislation to create a stronger, more effective regulatory regime to improve oversight of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks ("housing government-sponsored enterprises" or "housing GSEs") and appreciates the considerable efforts of Chairman Oxley and Chairman Baker in crafting H.R. 1461. However,

H.R. 1461 fails to include key elements that are essential to protect the safety and soundness of the housing finance system and the broader financial system at large. As a result, the Administration opposes the bill."




Best response to Number 2 is here:http://www.reuters.com/article/pressReleas...

Community Reinvestment Act May Have Deterred Risky Mortgage Lending

"NEW YORK--(Business Wire)--A Traiger & Hinckley LLP study of 2006 mortgage loan data suggests
that the Community Reinvestment Act, a federal law that requires banks
to help serve the credit needs of their local communities, including
low- and moderate-income neighborhoods, deterred banks from engaging
in the kinds of risky lending practices that are provoking the
foreclosure crisis.

Compared to other lenders in their communities, banks making loans
in their CRA assessment areas (CRA Banks) were less likely to make a
high cost loan, charged less for the high cost loans they did make,
and were substantially more likely to eschew the secondary market and
retain high cost and other loans in portfolio."

These posters all have gleaned their lies from the National Review, Bloomberg, talk-radio, and John McCain campaign.

[margotb822]

12. Great info, thanks!

[riverdeep]

10. What you're reading is an amalgam of libertarian takes on the problem,

funny how they didn't listen to the libertarians on the run up to the war, and classic blame the Clinton tendency of the entrenched Republican organization.

I'll leave it to others to address some of the other points, but here's your take down for the Community Reinvestment Act bullshit:

"The act had the support of a nonprofit organization, the Association of Community Organizations for Reform Now (ACORN). It survived two terms of Ronald Reagan, the Gingrich era and three terms of Bushes before apparently creating today's crisis.

Time magazine pointed out in a recent article that CRA-regulated institutions — meaning commercial banks — weren't the big players in the run-up of bad loans. The subprime mortgage binge, Time reported, came from 2003 to 2006 and was brought about by unregulated mortgage brokers financed by now-busted, unregulated Wall Street investment banks."

http://www.minnpost.com/douggrow/2008/09/24/3634/ellison_angered_and_shocked_that_some_are_blaming_the_poor_and_blacks_for_wall_streets_troubles

I actually agree that the Fed has been playing band-aid for a long time, however, the Fed chairman has been a Republican for decades.

The trump card is this: you had six years of an outright majority and eight years of 2 out three branches and only a slim defecit in the third. If you saw the problems as you described, why didn't you do anything about them? Personal responsibility, look into it.

[radfringe]

11. send them these - notice the dates... 2004, repubs still in charge

http://www.whitehouse.gov/news/releases/2004/08/20040809-9.html

Fact Sheet: America's Ownership Society: Expanding Opportunities

"...if you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country."

-President George W. Bush, June 17, 2004

The Challenge: America's Changing Society

Life in America is changing dramatically, and President Bush believes that the Federal government should change too to help meet the challenges of our times. American families should have choices and access they need to affordable health care and homeownership; Americans should have the option of managing their own retirement; and small businesses, which employ over half of all workers, need lower taxes and fewer government mandates so they can grow.


Expanding Homeownership. The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush's initiative to dismantle the barriers to homeownership includes:

-American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;

-Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;

-Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and

-Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.

----------

from bloomberg:

March 22 2004: Greenspan Backs Homeowner Debt as Prices Increase
http://www.dailypaul.com/node/62116#comment-652441

March 22 (Bloomberg) -- U.S. homeowners have amassed a record $6.82 trillion of mortgage debt as real estate values jumped in the past decade, and have borrowed against their homes for spending money. Federal Reserve Chairman Alan Greenspan, the nation's guardian of financial stability, is supporting them.

``We know that increases in home values and the borrowing against home equity likely helped cushion the effects of a declining stock market during 2001 and 2002,'' Greenspan said in a Feb. 23 speech in Washington.

Some economists including Yale University's Robert Shiller say they disagree with the Fed chairman, arguing that consumers shouldn't use home values to supplement spending when their hourly wages are rising at the slowest pace on record and the savings rate is a third of the last decade's average. As borrowing costs rise, mortgage payments may jump for households with adjustable-rate loans, causing delinquencies, Shiller says.

``Lenders are allowing people to borrow more against their house, but Greenspan is saying that home prices are outstripping that,'' said Shiller, a 57-year-old professor of economics at Yale, in a March 18 phone interview from Rome. His 2000 book, ``Irrational Exuberance,'' published before the 2001-2002 market slide, argued that stocks were overvalued.

The surge in house values is ``not going to continue,'' Shiller said. ``It's already slowing down in a number of cities, where we could see home price declines. There is a possibility of a real problem. I wouldn't minimize it.'' Last year's 7.5 percent jump in the median house price to $170,000 was the biggest since an 11.7 percent increase in 1980.

[Winterblues]

13. When all else fails.....~...."It's Clinton's Fault"

Pathetic....

[margotb822]

14. I know

It's completely absurd

[margotb822]

15. My own response:

I didn't think I could do it, but I did. Just break the nonsense into small parts and tackle each one:

Ok, first, when you post things with phrases like "Democrat cronies" and "political angels" and then don't post a link to your dubious source, I know that you are not serious about having a reasonable debate about how these current problem. Second, Clinton hasn't been president for almost eight years, and trying to pin the blame solely on him makes you sound partisan and pathetic. Get over him already! Now the CRA did not force banks to give loans to people they thought were "too risky." It just demanded equality in the availablity of credit throughout a neighborhood. See the difference? The expansion of the CRA in 1995 was controversial and because of that, it was subject to revision in seven years (or under this current president). It was the lenders themselves that did not mitigate loan risk with savings deposits. I will admit that the changes made in 1995 were risky, but the opportunity to turn this train around was on Bush's plate in 2002. And what did he do? Well, he moved Fanne Mae and Freddie Mac under the Department of the Tresury from HUD. Hm, so Bush was the last person to sign a revision to the CRA? Weird what happens when you actually look at the facts instead of just watching Fox News (or wherever you got this junk from).

Now, as th Fannie and Freddie political contributions, you know that Rick Davis' firm has received $15,000 a month since the end of 2005 and that, even though Davis said he left the firm at that time, he still remains the treasurer and corporate director? And what was this $480,000 for? Well, in McCain's own words: Access. Oh, and deregulation. Now, Obama, on the other hand, has received $112,000 out of $4.3 million (2.6%) donated by Fannie Mae and Freddie Mac to federal candidates since 2005 (or, in the same time that McCain's campaign manager received more than four times as much).

Now, the Glass-Steagall Act was passed in 1933. It prohibited commercial banks from collaborating with full-service brokerage firms or participating in investment banking activities. And it protected bank depositors from the additional risks associated with security transactions. Essentially, it shored up the holes that caused the Stock Market crash of 1929 and the Great Depression. And it moved to prevent incidents like that from happening again.

This acts was undone in parts by proponents of deregulation. In 1980, the Depository Institutions Deregulation and Monetary Control Act. Then in 1982, the Garn-St. Germain Depository Institutions Act was passed. Although the deregulation of S&Ls gave them many of the capabilities of banks, it did not bring them under the same regulations as banks, and the new legislation allowed them to enter new lending businesses with very little oversight. This lead to the S&L crisis and the Keating Five Scandal (which I'm sure you'd like to ignore, but is entirely pertinent to this discussion).

Then the Gramm-Leach-Bliley Act was enacted in 1999 and this allowed commercial and investment banks to consolidate and eased credit restrictions, thus largely contributing to the subprime crisis. Gramm is now McCain's economic advisor.

So, the two major steps taken in dismantling the protection of against another Great Depression have lead to two major financial crises and almost $1 trillion in taxpayer buyouts. Both of these efforts were spearheaded by Republicans, in the name of deregulation, and both have been cause for major government intervention. Did it ever occur that to people that maybe those people that lived through the Great Depression actually did know how to prevent another?

While I appreciate your attempt to place the blame squarely on Democrats, relaity shows a different story. So, next time, instead of just copying some trash from a website, do your own research.

(I admit, I may have been harsh at the end, but this guy definitely deserved it)

[rucky]

16. Here's a great article debunking that...

http://www.newamerica.net/blog/asset-building/2008/no-larry-cra-didn-t-cause-sub-prime-mess-3210


No, Larry, CRA Didn’t Cause the Sub-Prime Mess
Ellen Seidman -
April 15, 2008 - 9:55am

It has lately become fashionable for conservative pundits (Larry Kudlow, George Will) and disgruntled ex-bankers (Vernon Hill, for example, in his March 7 American Banker editorial) to blame the current credit crisis on the Community Reinvestment Act. This is patent nonsense. The sub-prime debacle has many causes, including greed, lack of and ineffective regulation, failures of risk assessment and management, and misplaced optimism. But CRA is not to blame
...

Second, CRA does not either encourage or condone bad lending. Bank regulators were decrying bad subprime lending before the turn of the millennium (see Interagency Guidance on Subprime Lending), and warning the CRA-covered institutions we regulated that badly underwritten subprime products that ignored consumer protections were not acceptable. Lenders not subject to CRA did not receive similar warnings.And we also explained to those we regulated how to serve lower income communities and borrowers in a manner that was good for the borrower, good for the bank, and earned CRA credit.

...

CRA enforcement became a lower priority for bank regulators after 2001. My successor at the Office of Thrift Supervision, in fact, led an effort-eventually thwarted-to unilaterally loosen CRA regulations for institutions with more than $1 billion in assets. See 70 Fed. Reg. 10023. Nevertheless, CRA regulations were eased more generally in 2005. See 70 Fed. Reg. 44256.
...

Finally, it is nevertheless the case that CRA-covered lenders are not the source of the problem. One of CRA's major failings, in fact, is that it only applies to banks and thrifts. Remember all the investment banks who demanded product and then sliced and diced loans until it was impossible to understand their quality? They're not covered. Neither are the independent mortgage banks, the kinds of firms that have gone bankrupt or nearly so because of their abysmal lending practices, who regularly made about 50% of the high cost loans. Bank affiliates, another uncovered group, made about 12% of the high cost loans.

[rucky]

19. Here's another one...

http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis

[margotb822]

22. Great Articles, thanks!

[DangerDave921]

17. EVERYONE shares some blame for this

I do not absolve Democrats on this at all. All of our political leaders knew for years this was a disaster waiting to happen.

There was pressure to lend money to lower income people.
There was greed of bankers to do risky loans and sell them immediately.
There were borrowers who borrowed more than they should under the delusional belief that the market would go up forever.
There were wall street fucks who thought they were invincible.
There were politicians who hid their head in the sand for years.

I am sick of all these people finger-pointing. Look in the mirror.

[Brewman_Jax]

20. Republicants were in the White House 20 of the past 28 years

and if your freeper "friend" can't reference them, esp. deregulation under Reagan, and has no actual sources, it's a FAIL.

[DangerDave921]

23. 20 out of 28? NO

With all of George's time on his ranch, it's really only about 17 years in the white house! LOL

[screembloodymurder]

21. Look at when the interest rates were lowered.

Fed fund rates were near 6% in 2000. Bush came into office and called Greenspan into the WH. Greenspan was pressured to lower rates. Rates were lowered to below 2%. .